Built in LA: What you need to know about mobile gaming, according to SGN’s Chris DeWolfe

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Chris DeWolfe is known as one of the founders of LA tech: he has been in the scene since 1997 and in 2003 co-founded Myspace (where he later served as CEO).

Now DeWolfe is driving more growth in LA tech as co-founder and CEO of social gaming company SGN. The 100-person company will be adding 20 more people to their team within the next four months.

Their growth plan is this: create four to five “super high quality” games each year and then hire as the games (inevitably) become hits.

“We expect our games to be evergreen – meaning as long as we add new content and challenges, a game could theoretically last forever,” DeWolfe said.

SGN’s most recent successes include casual games like Panda Jam and Bingo Blingo: “I’ve

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always said that you should work on projects that you love,” DeWolfe said. “At SGN we love puzzle games. I think that’s why we’re successful. It also doesn’t hurt that they monetize incredibly well.”

The goal for SGN is to have at least three more games in the top-grossing charts of the App Store and Google Play Store: “We are well on our way to achieving that goal which provides us with additional options to get even bigger.”

SGN is already a pretty big force to be reckoned with though. The Beverly Hills-based company has raised nearly $20 million over the past five years and its growth was further fueled by its 2013 acquisition of Carlsbad-based social gaming company Mob Science. Today, SGN stands as one of the “Big 10” gaming companies out there.

“Roughly 10 companies control the top grossing charts (SGN being one of these companies),” DeWolfe said. “I project we will continue to see more consolidation and competition in the industry. The most nimble companies with critical mass of users, creative talent and analytics tools will win.”

As he helps navigate SGN to the top, DeWolfe sat down with Built In LA to talk about SGN’s competitors, advertising plans and its fit into LA:

How has the rapid consumer adoption of mobile and social games affected competition in the gaming industry?

These games have democratized the industry — meaning it’s no longer niche. Different studies have shown that over 80% of the US population has played a game in the last year. Clearly, there are definitely more customers and more revenue up for grabs.

That said, there is a ton of competition, King and Supercell being at the top of the list. Increased competition also results in further consolidation in the companies that are developing top grossing games.

So is it too late for new gaming companies to jump in?

In terms of entering the market, I don’t think it’s too late. However, it is very challenging to raise money from institutional investors. We’re seeing smaller game developers doing work for hire jobs to fund projects that they want to release on their own.

It’s also interesting to note, that Supercell, with a $3.2 billion valuation, just started in 2011.

Okay, so what’s your advice for those brand new gaming studios?

Stay focused on one genre of games that you are really passionate about.  Build a quick prototype to gauge whether or not the game mechanic is fun. If it is not sustaining, fail fast and move on. In the long term, one of the lessons we’ve learned is to value quality over speed to market. There is a new bar of polish that is required for a game to be a long term hit.

How is SGN experimenting with new advertising platforms outside of Facebook?

The majority of our new installs come from cross-promotion from other SGN games, word-of-mouth and platform promotion. However, we do have a sizable budget with Facebook. Their mobile advertising works from an ROI perspective. The targeting is more refined than other sources.

That said, we are excited about other user acquisition platforms like Twitter, Google and mobile programmatic buying through our real time bidder. Theoretically, the mobile advertising market should become much more efficient as buyers are only bidding for those impressions that are likely to convert.

How have you seen the LA tech community grow and change since 1997?

LA is the creative hub of the world. Any startup that’s based on content and storytelling is perfect for the LA ecosystem. We have a mayor who understands our challenges and is extremely supportive. Additionally, new venture sources are emerging and getting more aggressive in LA investments like the Pritzker Group, Upfront Ventures and Greycroft.

We still face challenges with our dispersed geography. You see tech hubs in Pasadena, Hollywood, Culver City, Venice and Santa Monica. In LA traffic, you can be driving for hours just for a meeting or networking event. I think with more consolidation in key areas, this issue is becoming less important.

May 5, 2014


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